Chinese Solar,Wind and Smart Grid companies face Fierce Price Wars in Domestic Market
July 18, 2010India's massive illegal Grey Market for mobile phones raises concerns
July 19, 2010China has recently come under strong criticism for unfairly treatment foreign companies.While MNCs are looking towards China as a source of growth ,Chinese are only interested in Technology that these companies offer.Rules and regulations are such that foreign companies are forced to tie up and share technology with local partners.This inevitably leads to local partners going on their own and competing with the same companies they got their technology from.China’s Wind Energy Industry is a testament of this fact.Earlier China had made it mandatory to use domestically manufactured components for Wind Turbines.From a negligible marketshare in Wind Turbines in 2006,Chinese Wind Turbine producers are now dominant in the domestic market.In fact these companies are looking to expand abroad as price wars in Chinese market gets savage.
GE and Google have recently come out with strongly worded language against China.Though foreign companies are reticent about voicing protests against China’s autocratic one party Communist system,recently some companies have started to speak out.As discrimination becomes increasingly worse and the atmosphere becomes hostile,companies have blasted Chinese policies.Now German companies have also followed their US peers in speaking against China.Siemens and BASF , two of the worlds biggest MNCs with their headquarters in Germany,have raised concerns with the Chinese premier about worsening conditions in the country.China is already under pressure for currency manipulation and its huge trade surplus.These comments are sure to further add pressure to China’s growing problems.
German Executives Push Back in China – WSJ
Jürgen Hambrecht, chairman of BASF AG, the giant chemical company, and Peter Löscher, chief executive of Siemens AG, the industrial conglomerate, reiterated foreign criticism in the meeting with Premier Wen Jiabao about rules that foreign companies say compel them to transfer valuable intellectual property in order to gain market access, according to people present.Mr. Löscher reiterated widespread foreign complaints about procurement rules China has drafted that could give a major advantage to companies with “indigenous innovation”—a policy foreign companies fear could shut them out of tens of billions of dollars in government contracts. Mr. Löscher also called on China to remove investment restrictions in certain sectors where foreign companies are required to form joint ventures with Chinese companies, said Finn Mayer, a reporter with the German newspaper Handelsblatt who was also there.
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[…] China has come under fire from MNC’s for favoring local firms over foreign ones and providing massive subsidies to its domestic industries.The Chinese government has been criticized for its policies which allow market access in exchange for technology transfer.This is leading to frequent clashes between the Chinese government and companies on one hand and foreign governments on the other hand.Huawei has been blacklisted by the Indian government and prevented from acquiring US assets by the USA government.Chinalco’s bid to acquire Rio Tinto was also blocked as foreign governments view Chinese state owned companies with deep misgivings.China has not improved it policies despite these hurdles and criticism.It announced a massive $15 billion subsidy over the next 10 years to promote Clean Transportation which would favor domestic firms. […]
[…] has come under a lot of criticism recently from conglomerates like GE and Siemens over discrimination being practised against non-Chinese companies.Massive implicit and explicit […]